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The rise of clean energy markets: Evidence from frequency-domain spillover effects between critical metals and energy markets

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  • Zhu, Yongguang
  • Gong, Yuna
  • Yang, Lanyong
  • Xu, Deyi

Abstract

This study investigates the dynamic volatility spillovers among critical metals, traditional energy, and clean energy markets using a sophisticated frequency-domain approach. Leveraging the improved complete ensemble empirical mode decomposition with adaptive noise and time-varying parameter vector autoregression models, we decompose daily logarithmic returns into high, middle, and low-frequency components. Our findings reveal significant heterogeneity in spillover effects across different frequencies, industries, and commodity categories. Clean energy sectors emerge as prominent contributors to market spillovers, reflecting their increasing sensitivity to short-term market dynamics. In contrast, traditional energy markets transition from being spillover sources to net recipients as the energy transition accelerates. Critical metals, particularly lithium and platinum, play a dominant role in long-term market integration, highlighting their growing importance in the global energy transition. These results provide actionable insights for policymakers and investors seeking to manage risks and optimize strategies in the evolving energy landscape.

Suggested Citation

  • Zhu, Yongguang & Gong, Yuna & Yang, Lanyong & Xu, Deyi, 2025. "The rise of clean energy markets: Evidence from frequency-domain spillover effects between critical metals and energy markets," Energy Economics, Elsevier, vol. 141(C).
    • Handle: RePEc:eee:eneeco:v:141:y:2025:i:c:s0140988324008351
    DOI: 10.1016/j.eneco.2024.108126
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    2. Hua, Siying & Jiang, Yuanying & Chen, Binxia, 2026. "Decoding multidimensional risk spillovers in “metal-energy-carbon” System: Novel insights from higher-order moments," Renewable Energy, Elsevier, vol. 256(PD).

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